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Business plan

Name – Sachin Kumar

Company – illumind solar

Technologies Pvt. Ltd.

Email –sachin@illumind.in

Contact – 9930206093

www.illumind.in

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Index

Subject Page no.

Executive Summary ------------------------------------------------------- 3

Business Plan

Vision & Mission -------------------------------------------------------- 5

The Problem --------------------------------------------------------- 5

The Solution --------------------------------------------------------- 5

Opportunity --------------------------------------------------------- 5

Team --------------------------------------------------------- 5

Business Model ---------------------------------------------------------- 6

Product --------------------------------------------------------- 7

Market Analysis ---------------------------------------------------------- 9

Competitor Analysis --------------------------------------------------------- 9

Competitive Advantage ---------------------------------------------------------- 10

Operating Plan ----------------------------------------------------------- 10

Customer/Consumer Analysis ---------------------------------------------------------- 11

Future Plans ----------------------------------------------------------- 12

Financial Statements ----------------------------------------------------------- 12

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Executive Summary

illumind is a start up in the field of Solar lighting, that aims to provide affordable yet

high performance solar lights to solve lighting needs of a vast rural population in India

that has meager or absolutely no access to electricity.

1. Need for the business

In India there are more than 300million people in 42000 villages with no access to

electricity and about 500million people with very poor access to electricity (about 3

hours a day). Millions of people are thus bereft of a basic need – lighting. These people

thus resort to hazardous sources of lighting like kerosene lanterns which have been a

cause for thousands of accidents each year.

In the recent years, there have been a number of initiatives taken to help this segment

by introduction of solar lanterns etc. However, these have largely remained inaccessible

to this segment as they earn a meager income of $2 a day.

2. Concept of the business

The business is built upon two strong pillars that set it apart from the current scenario.

Firstly, we have come up with an innovative and optimized product which is extremely energy

efficient as well as easy to use due to its extremely compact design. Secondly, we intend to

implement a ‘Product as a Service’ model in villages that would allow people to use our lights

at a cost of around Rs.3a day. This subscription based model would be affordable to the target

segment and is better than purchasing the device itself which cost around $10.

3. Feasibility of setting up the business

The huge market segment that we target has been largely uncatered to and the edge that our

product has over the other existing products is easily apparent. Similarly, the ‘product as a

service’ business model serves our market segment appropriately.

The superiority of our products is noticeable from the table below that showcases our product’s

technical specifications (under the header i-Diya Home) as well as those of other prominent

players in the market.

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i-Diya Home Aishwarya NEST

TERI 3W Lantern Sun King

Light (Lm) 210 100 110 50

Lighting Hours 5 & 13 6 5 4

Charging Time 8 9 12 14

Size Palm Size Hurricane Lantern Hurricane Lantern Hurricane Lantern

Self Sufficient Yes No No No

Inbuilt Solar Panel

Yes No No No

Weight (gm) 350 2200 1800 1200

Price 590 1600 1500 900

We have received an order for 70,000 units from a distributor in Africa that wishes to sell our

product in African countries like Somalia, South Africa etc. Moreover, we received working

interest from the following organizations:

- United Science of Africa (Kenya)

- ESCCSL (Bangladesh)

- Nze Timothy Akano Foundation (Nigeria)

- Shoprite Checkers ( South Africa, Namibia, Swaziland and Lesotho)

These tie-ups further emphasize on our product’s attractiveness.

Similarly, the Product as a Service business model that we wish to implement has its own merits

since it makes an attractive offering available to our target market segment at a very low cost

and the continuous returns from this subscription-based model make it more rewarding than

conventional one time sales. In Product as a Service model we have continuous engagement

with the customer which is a key in future business development.

4. Awards and Nominations

We have also won the following awards and nominations:

Winner of Global Student Entrepreneur Awards – India West 2013 which is conducted

by Entrepreneur’s Organization. We will represent India in the world finals of GSEA that

will be conducted in Washington DC.

Red Herring: We have been nominated for Red Herring Asia’s Top 100 award-2013 for

Innovation. We had moved into the final round.

TATA First Dot: We have also been awarded by TATA First Dot.

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Business Plan Vision –To illuminate underprivileged homes and completely eliminate hazardous ways of lighting. Mission – To offer the best solution at an affordable, low cost to underprivileged homes facing lighting problems.

The Problem – In India there are more than 300million people having no access

to electricity. These are the people who earn less than 100Rs a day. After sunset

they can’t work, their kids can’t study because they cannot afford costly solar

lights and they don’t have grid connectivity. It is resulting in inefficiency in

terms of productivity, education and living standards.

Solution/Product - Our products are very low cost, starting less than Rs 500. It is

very compact unlike other cumbersome solar lanterns. Its size makes it

multipurpose catering different lighting needs of a household like studying,

working, home lighting and camping. Our product is self-sufficient. It doesn’t

require any external component which makes it different from other products in

the market.

The Opportunity – We are targeting a market in which 300 million people don’t

have permanent access to electricity and 500 million people have partial access to

electricity. These are the people who in some part of the day need alternate

source of lighting. Still 42000 villages are not electrified in India. Lots of big and

small players are there in the market we are planning to operate. Some are sole

player in some part of country while rest is still not dominated by any large

player. This market is growing at huge pace due to recent fall in solar panel

prices.

TEAM

We are a three membered team. The role of team members is as following:-

Sachin Kumar – Founder, CEO & CTO

Sachin is undergraduate student at Department of Electrical Engineering, IIT

Bombay. He is also a former team member Evo - 1, IIT Bombay’s electric formula

1 racing car.

Chandresh Kumar – Marketing

Chandresh is undergraduate student at Department of Electrical Engineering, IIT

Bombay. He is co-founder of Origame designworks and has a working

experience in marketing with Suzlon Energy Limited.

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Ankit Choudhary – Supply management

Ankit is a MBA in human resource management. He has four years of work

experience.

Ankit will be managing supply chain.

Advisors

Akash Sureka

Founder & CEO Hoopz Planet info Pvt. Ltd.

Phani Bhusan

Founder Anant Computing Platform

Dr. Amarendra Sahoo

Former Chief General Manager Reserve Bank of India

Business Model – Currently we are having are two revenue models. For India

we are having Product as a Service (PAS) and for overseas we are having sales

with moderate margin.

Product as a Service (PAS)

In PAS, we would be renting solar lights instead of selling them. PAS has key

benefits over sales for consumer as well as for us. As an organization is have a

few key benefits in long run.

In PAS, our representative in every village will deliver the charged devices on

demand and will collect discharged devices in the morning with the rent. Soon

consumer would be able to order devices over phone. We are building

application for these phones. Along with this our representative will also

maintain a dynamic database of consumer economic and employment behavior.

Benefits for Customer:

No huge initial investment for the customer. Huge initial investment has

been the key factor in the failure of the solar market. Due to huge initial

cost, the solar market hasn’t been able to penetrate to the low income

segment, mainly rural.

No maintenance cost.

No hassle of charging devices.

Pay as you go. Rent it when you need it.

Safe and healthy lighting at lower cost than any conventional method.

Increasing working efficiency with minimal cost.

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Benefits for us:

Best method of market penetration.

Continuous consumer interaction.

Through continuous consumer interaction building a dynamic database of

consumer needs and wants.

Data analytics will help us introduce new products and services of

consumer requirement efficiently and effectively.

Will help us entering other segments.

Can be tool for B2B tie ups.

Overseas: Currently we are having sales model with moderate margin for

African continent. Initial marketing efforts have shown tremendous response in

countries like – South Africa, Lesotho, Zimbabwe and several other countries in

Africa.

Product

Currently we are having two kinds of product - One for just lighting which is

enough for lighting a small room and other for lighting + cell phone charging.

Following are the basic features of our products:-

Portable – Our products are very compact size. Their sizes make it multipurpose.

It can not only be used as an alternate to the kerosene lamps used in their

household for lighting but also as an good alternative for night lamps or torches.

Energy Efficiency and Light Sensing – Our product have light sensors which

automatically turns it off during day or when put in light. This helps in

efficiently saving the energy and increasing the life of the product.

Rain Proof – Our products are rain proof. Consumer doesn’t have to be worried

about the weather unlike other products.

Robust – Our product is sufficiently robust. It doesn’t damage even on falling on

concrete floor.

Eco-Friendly - Our product are not only energy efficient but also environment

friendly because there is no lead acid battery so no toxic liquid emission. The

battery used in the product can be safely disposed after use. It reduces around

10Kg CO2 emission per household per month which would have been emitted

on consumption of kerosene lamps.

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Currently we are having two products-

i-Diya Home– This is our basic model. It produces sufficient light to light

up a small room. This is basically developed for tasks which require

intense and mild lighting like studying, cooking etc.

i-Diya Charge – It produces equivalent light to i-Diya Home and can

also charge a cell phone. This is perfect for the places where people have

no or very little access to electricity.

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Market Analysis

Consumer Status - The off grid lighting is a very fast growing market. Still

many parts in India don’t have grid connectivity especially rural. 35.5%

population still lives without electricity. This is the market segment which we are

trying to address.

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Competitor Analysis - There are several players in the solar lighting market.

Some of them are very well established. A few of them are SELCO in Karnataka,

TERI, NEST, DLight, Green light planet and many more. Even though there are

so many players but still they haven’t penetrated to the grass root level. Still

there is a huge market to be addressed. Out of these only SELCO, TERI and

NEST have done good job and have captured very good market in their

respective target locations like SELCO which is sole player in Karnataka in terms

of market size.

There are some other established organisations like DLight, Green light Planet

and others. Even though they sell a good amount but they are facing many

issues. One of the major issues is reliability. Through our market survey in a

village we found that most of DLight’s products have failed in 3-4 months and

barely any survived for a year. Others are also facing reliability, technical and

other issues.

The superiority of our products is noticeable from the table below that showcases

our product’s technical specifications (under the header i-Diya Home) as well as

those of other prominent players in the market:

i-Diya Home* Aishwarya NEST

TERI 3W Lantern Sun King

Light (Lm) 210 100 110 50

Lighting Hours 5 & 13 6 5 4

Charging Time 8 9 12 14

Size Palm Size Hurricane Lantern Hurricane Lantern Hurricane Lantern

Self Sufficient Yes No No No

Inbuilt Solar Panel

Yes No No No

Weight (gm) 350 2200 1800 1200

Price 590 1600 1500 900

*patent pending

833 377 1210

Rural Urban Total

300

0

300

480

250

730

CHART TITLE

No access Partial Access

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Competitive Advantage

We are having a few key advantages over our competitors. We have the most

efficient and cost effective product in the market. We are having the most

affordable method of bringing these products the people who are in most need of

it and can’t afford them.

Continuous innovation and implementing smart strategy based on output of

PAS is going to be the one of the key competitive advantages.

First mover’s advantage is going to be the biggest factor.

Operating Plan Currently we have outsourced manufacturing. We plan to keep our focus on

R&D and execution. Operating plan could be divided into following stages:

1- R&D and Data Lab – R&D lab will focus on the product research based on

the consumer requirement. Data lab will extract the inputs from our

representatives in the villages and analyze it. Based on this analysis, data

lab will provide input to the research division.

2- Execution division – This division will focus on the pre execution tasks.

This division will collaborate with the NGOs and will provide all the

required data to the ground team. This division will provide location,

concerned person and other information for a smooth campaign.

3- Ground Execution – Our team of two representatives will visit the villages

based on the information from the execution division. Our representatives

will have a campaign in every village and will do the set up and make

people aware of our initiatives and advantages of PAS.

Customer/Consumer Analysis Location - Our target consumer is located in rural and tier II and III cities. These

are the places where either no or partial electricity is available. These are the

people who don’t have access to electricity for 3-4 days during black outs and

usually have daily power cut from 5 to 18 hours. Some of them don’t have

permanent access to electricity.

Economic Profile – Our target customer ranges from people who earn less than

$2 per day to a few thousand per month. These are the people who spend

around on an average $2 on kerosene or candles for lighting per month due to

unavailability of grid electricity. Our target customers are very low income

segment people and cannot afford to buy costly solar lighting solutions and have

to live with the hazardous kerosene.

Kerosene lighting is very hazardous and causes around 1.6 million deaths

worldwide per year. Around 1 million people die in kerosene lighting accidents

per year.

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Future Plans

With implementation of PAS, we would enter other sectors besides solar

lighting. These sectors include agriculture and education. In agriculture we plan

to start with advisory services to product supply.

Financial Statement

Revenue

FY 13-14 FY 14-15 FY 15-16

Revenue 0 12656 101925

EBITDA -38 -4328 17371

-20000

0

20000

40000

60000

80000

100000

120000

'000

PAS

FY 13-14 FY 14-15 FY 15-16

Revenue (mn) 26 26

EBITDA (mn) 10 10

0

5

10

15

20

25

30

Overseas

mn

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Fund Requirement

Field Fund Requirement ($)

Product Development 30000

R&D set up 1,00,000

Talent acquisition(Employees)

4,00,000

Office and other infra 1,00,000

PAS Set up 5,00,000

Products 8,00,000

Legal Expenditure 50,000

Total Requirement 19,80,000

Balance sheet

`

CY2013 CY2014 CY2015

Sources of Fund

Share Capital 51500000 251500000 251500000

Reserves and Surpluses 29190000 516687266.7 2737716392

Total Shareholders Fund 80690000 768187266.7 2989216392

Long Term Liability 0 0 0

Total liability 0 0 0

Total sources of Fund 80690000 768187266.7 2989216392

Application of Fund Gross Block 3000000 657100000 3089500000

Accumulated Depreciation 0 133449583.3 1085394583

Net block 3000000 523650416.7 2004105417

Investments 0 0 0

Current Assets Inventory 11250000 180000000 225000000

Accounts Receivables 27300000 223350000 911850000

Cash & cash equivalents 39140000 83196850 303000975

Total Current Assets 77690000 486546850 1439850975

Current liabilities Accounts Payable 0 0 0

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Short term Liability(WC Loan) 0 242010000 454740000

Provisions 0 0 0

Total Current Liabilities and provisions 0 242010000 454740000

Net Current assets 77690000 244536850 985110975

Total Application of Funds 80690000 768187266.7 2989216392

Profit & Loss Projections

Domestic

CY2014 CY2015

Revenues From PAS rental 759375000 6115500000

Operating costs Cost of Goods Sold 0 0

General Administrative Expense Selling Expenses 240700000 896400000

Employee Cost 268050000 1638200000

Maintenance cost 800000 2000000

Cash Operating Expense 509550000 2536600000

EBITDA 249825000 3578900000

Depreciation expenses 133449583 951945000

EBIT 116375417 2626955000

interest Cost 18150750 52256250

PBT 98224666.7 2574698750

Tax 29467400 772409625

PAT 68757266.7 1802289125

Overseas

Pnl CY2013 CY2014 CY2015

Revenues Sales 109200000 1560000000 1560000000

COGS 67200000 960000000 960000000

Other Expenses 300000 1800000 1800000

Cash Operating Expense 67500000 961800000 961800000

EBITDA 41700000 598200000 598200000

Depreciation expenses 0 0 0

EBIT 41700000 598200000 598200000

interest Cost 0 0 0

PBT 41700000 598200000 598200000

Tax 12510000 179460000 179460000

PAT 29190000 418740000 418740000